Ed Balls is right. Mark Carney isn't the Messiah. But could he be?

Speaking at a business conference this morning, the shadow chancellor suggested that George Osborne and other people in Government are placing an excessive burden on expectation of Mark Carney, the new Bank of England governor, to rescue the British economy.

Mr Balls:

"To quote Monty Python, he is not the Messiah. He can't work miracles. The reality is, interest rates are already very low."

"The Government rely upon the Bank of England to drive this recovery. I don't think it is possible with the Bank of England's powers. I think too much expectation has been heaped on to the new governor, which I don't think it is possible for monetary policy to deliver."

Mr Balls is surely right in his diagnosis about the expectations on Mr Carney, but that point is distinct from the policy prescription he offers. His view is that monetary policy is at its limit and therefore fiscal instruments are needed: borrow more for capital spending, he says.

However, there's another conclusion that can be drawn from this analysis, which is that Mr Carney still lacks the tools to complete the huge task he's been given. While the BoE's remit has been slightly relaxed, its main job is still to keep CPI inflation at around 2 per cent.

Yes, Mr Carney has been given some new latitude over how long he can depart from that target while seeking to spur growth, and some new tools to use, such as "forward guidance" to markets on interest rates. But more radical options like targetting GDP instead of inflation remain off the table, for now.

Mr Carney's arrival coincides with some cautious signs of optimism about the UK economy. But what if in, say, a year's time, his rescue mission is faltering? That would surely leave Mr Osborne looking for a way to support the Governor. It's more or less unthinkable that the Chancellor would follow Mr Balls' advice to borrow for capital.

But would Mr Osborne ever consider making a more dramatic change to the BoE remit? Even the suggestion might worry currency and gilt markets, but I know some serious City people who think Mr Osborne will ultimately have to bite the bullet and investing Mr Carney with the the sort of god-like powers that befit a monetary messiah?